Brazil protests show cost of hosting major sports events

Protests continuing amid Confederations Cup tournament in Rio

The protests that have broken out in Brazil in the last month are partly over the money the government has spent on preparing for the 2014 World Cup, which was granted to them by FIFA, the international soccer body.
(Davi Pinheiro/Reuters)

The fiery demonstrations on the streets of Rio de Janeiro and other Brazilian cities began in mid-June after a rise in bus fares, but have expanded to become a broader grievance about poor public services, especially education and health care, as well as government corruption.

On Thursday, about 5,000 anti-government protesters clashed with police outside Castelao stadium in Fortaleza, the site of the semifinal game between Italy and Spain.

When protesters see FIFA delegates and the festivities surrounding the Confederations Cup, "and you realize the stadia cost three times as much as you were promised, it was all going to be private sector and no public money, you’d get angry," says Andrew Jennings, author of FOUL! The Secret World of FIFA: Bribes, Vote-Rigging and Ticket Scandals.

According to Brazil’s sports ministry, the initial budget for stadiums and transit infrastructure for the 2014 World Cup was 25.5 billion reals ($11.4 billion US). It has grown to 28 billion reals ($12.7 billion) — nearly three times what it cost Germany to host the 2006 World Cup.

Many Brazilians feel that given the profound deficiencies in the country’s education and health-care systems, government spending on projects related to the World Cup in 2014, as well as the Olympics in 2016, is misguided.

On June 20, a million people across 80 Brazilian cities took to the streets to protest. The country’s president, Dilma Rousseff, has acknowledged their concerns but also appealed to citizens to temper their outrage, lest it jeopardize next year’s World Cup.

Broadening the reach of sports

Sporting bodies such as FIFA and the International Olympic Committee have made it part of their mandate to stage mega-events in developing countries as a way of extending their reach, says Norman O’Reilly, a professor of sports management at the University of Ottawa.

"You can’t just keep going back to the G8 countries, where you know there’s a little less risk."

Going into a developing nation, however, can highlight income disparities between the moneyed elites and the rest of the nation.

"I think any country, other than communist countries, that hosts [mega-sporting events] has to expect a group or groups to be offended by the amount of money that’s being spent," says Rick Burton, a professor of sports management at Syracuse University.

The economic benefits of hosting a major sporting event such as the World Cup or the Olympics are hotly debated. Those who prepare the bids for these events often tout an influx of tourism and spinoff effects for the local economy, from construction to merchandising.

As a protest against the government, the Brazilian NGO Rio de Paz (Rio Peace) placed soccer balls marked with red crosses in front of the National Congress in Brasilia. (Fabio Rodrigues-Pozzebom/Reuters)

The accounting firm PriceWaterhouseCoopers has reported that the preparation and staging of the 2010 Winter Olympics in Vancouver, for example, generated about $2.3 billion in real gross domestic product for the province of B.C.

But Stefan Szymanski, a sports economist and co-author of the book Soccernomics, has said there are "only very limited economic benefits" to hosting major sporting events.

"Governments claim that the investments in infrastructure will create construction activity and will boost the economy. But the construction of these structures really just displaces other construction activity, and those other construction activities usually are more productive," Szymanski said in an interview with the public policy site MercatorNet in 2011.

"So you’d be better off building roads and flats and new commercial properties than building stadiums, because stadiums just aren't used enough."

Legacy effects

O’Reilly, who worked on Toronto’s bid for the 2008 Olympics, says that many of the benefits associated with major sporting events are "legacy effects."

The building of new stadiums for a World Cup, for example, can lead to the establishment of local soccer teams after the event is over, which can have a lasting impact on the city’s sports culture, not to mention its economy.

As well, by making a massive investment in infrastructure for one large sporting event, a city or country improves its chances of being chosen to host another, even bigger competition. O’Reilly points out that prior to being chosen to host the 2014 World Cup, Rio hosted the 2007 Pan Am Games.

But legacy effects are unlikely to be top of mind for protesters in Brazil, says Burton.

"That person in the street, in the moment, who doesn’t have a job, or feels displaced or feels overwhelmed by the challenges they face — I don’t think they’re looking at discussions of return on investment or how this is going to leave this great legacy for Brazil," says Burton. "They’re wondering where their next meal is coming from."

O’Reilly says the mere fact of getting a World Cup or Olympics can be a PR coup. As TV audiences become more fragmented, mega-sporting events are among the few properties that still command worldwide interest, he says.

"The attention you get for the Olympics and World Cup is unmatchable anywhere else in the world these days," says O’Reilly. The event leads to heightened international awareness, which raises a city or country’s brand and can result in greater future tourism and foreign investment.

Although Montreal has become notorious in sports circles for the debts it accrued in hosting the 1976 Olympics, O’Reilly says hosting the event "put the city on the map."

"It’s by far the best-known city in Canada [internationally]. Toronto hasn’t had those big events, so people don’t know about it," he says.

There’s no denying the increased attention that comes with hosting a sports extravaganza, but Jennings says the locals rarely even get to see the action.

Major sporting events are "a hoax on the people, playing on their natural desire for sport – not realizing, they ain’t going to get a ticket," says Jennings.